Thursday, May 26, 2011 | Edited by Daniel Moores
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Shoppers Spending Less on Consumer Electronics The average U.S. household spent $1,179 on consumer electronics (CE) products in the past 12 months, down $201 from last year's findings, according to a new study released this week by the Consumer Electronics Association (CEA). CEA's 13th annual Household CE Ownership and Market Potential Study found that the average adult spent $652 on CE products in the past 12 months, down from $794 the 12 months before. Women spent, on average, $520 on CE, down $111 from last year's study. Men reported personally spending $793, down $176 from the 12 months before. The average household reports owning 24 discrete CE products, down slightly from 25 devices last year. "Consumer ownership of most devices has increased despite consumers spending less on CE in the past year," said Brian Markwalter, CEA's research and standards senior VP. "Several factors have led to a decrease in spending, including changes in consumer purchase patterns, product consolidation, decreasing price points and the high unemployment rate." The study also found that video products continue to be the most-owned CE device. Forty percent of televisions in U.S. households are HDTVs, with LCD TVs the preferred choice. Internet-connected TVs and 3DTVs, both included in the study for the first time this year, are two new products driving video growth. In particular, broadband-enabled TVs are expected to have a quick uptake, with 10 percent of consumers planning to purchase an Internet-connected TV in the next year. Household penetration for LCD TVs grew the most of any CE device, growing 12 percent year-over-year. Wireless CE products also gained momentum among U.S. households. Ownership of e-readers doubled to 13 percent over the past 12 months. Additionally, more than one-third of households now own a smartphone and almost one in 10 households own a tablet computer. These products are expected to see increased penetration in the marketplace this year as they were among the top devices consumers intend to purchase, CEA said. "There are lot of new and innovative wireless technologies attracting consumer interest and excitement," said Markwalter. "The popularity of these devices and other emerging CE products will be a bright spot for the industry moving forward." The study also showed that households are increasingly streaming video content through their devices. Subscriptions to movie rental services experienced a 40 percent growth year-over-year. With more than 28 million subscribers, content providers have enabled access to services directly through displays, game consoles and other set-top boxes connected to the Internet. Greater broadband access will continue to increase streaming video subscriptions, the study concluded. (Source: TWICE, 05/24/11) |
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Sporting Goods Industry on the Rebound According to the Sporting Goods Manufacturers Association's State of the Industry Report (2011), the sporting goods business in 2010 showed its largest one-year revenue growth swing in nearly 20 years. In 2010, U.S. wholesale sales of sporting goods equipment, sports apparel, licensed merchandise, athletic footwear, and fitness equipment totaled $74.2 billion. That was a 3.5 percent increase over 2009, when sales were $71.6 billion. This boost in sales indicates that the sporting goods industry is "on the rebound" since sales in 2009 were 4.3 percent less than they were in 2008. The main category in the sports products industry is athletic apparel, which increased 4.8 percent to $29.6 billion. The second largest category is sporting goods equipment at $20.4 billion. Athletic footwear sales were $12.6 billion. Sports licensed merchandise sales amounted to $7.3 billion. Fitness equipment was also strong in 2010 -- up 4.1 percent to $4.3 billion. The treadmill is still the most popular piece of fitness equipment. In athletic footwear, the running shoe remains the category leader. Golf is the largest category under sporting goods equipment, while shirts/tops represent the top selling item under sports apparel. "The sporting goods industry has strengthened in the last 12-16 months, despite the challenges which have been presented by a number of issues such as the vagaries of the worldwide economy, federal and state legislation, sourcing and production concerns, regulations by sport governing bodies, and counterfeiting," said SGMA President Tom Cove. "Since 60 percent of SGMA member companies say they need more manufacturing capacity and will increase production by nearly 25 percent, chances are good that 2011 will be a strong year, as well. Our survey also indicates that 88 percent of our member companies expect international sales will increase in 2011." There are a number of factors which are affecting the overall growth and development of the entire sports, fitness, and recreation industry: Electronic Communication: Manufacturers and retailers are more creative in how they reach the consumer as Twitter, Facebook, Texting, Shutterfly, RueLaLa, and Groupon are some of the ways in which marketing and advertising messages are being transmitted. Daily Concerns: Throughout the year, the two biggest concerns by manufacturers about the retail sector will be (1) shifting inventory risk to manufacturers and (2) emphasis on product quality. Focused Expenditures: More than 60 percent of Americans purchased fitness-related services or fitness equipment in 2010. School Sports Spending Suffers: According to Up2Us, more than $2 billion was cut from school sports budgets in the 2009-2010 school year. Budgets and Expenses: In 2010, expenses for sponsorships and player endorsements fell while spending on new product development and advertising rose. Team Spirit Spending: Wholesale sales of sports licensed products and merchandise rose by 5 percent -- from $6.9 billion in 2009 to $7.3 billion in 2010. That increase is due to "pent-up" demand and consumers' desire to be affiliated with a favorite team or sport. Digital Interaction: Since 2009, three group exercise activities (group cycling, cardio tennis and high-impact aerobics) have experienced double-digit gains in overall participation. This growth has been driven by the "Generation Y" population (ages 11-30) and its philosophy on social networking as a way to communicate and socialize. PE Pays Off: For today's children, they are more than three times likely to participate in team sports if they have PE classes in school than if they don't have PE in school. Trends & Tendencies of Sports Participation In team sports, there is positive news to report. Many traditional endeavors such as outdoor soccer, indoor soccer, tackle football, baseball, basketball, cheerleading, and court volleyball have experienced small degrees of growth in "overall" participation since 2009 -- reversing a recent trend in the other direction -- and "overall" participation in some "niche" team sports activities has showcased dramatic increases since 2009. Rugby is up 50.7 percent, lacrosse is up 37.7 percent, field hockey is up 21.8 percent, and beach volleyball is up 12.3 percent. World Cup Effect: With no specific marketing program or effort geared at increasing interest in soccer, outdoor soccer participation rose by almost 3 percent in 2010 -- mainly due to the existence of the World Cup in South Africa and TV coverage of the event. Trendy Teams: Four team sports have had double-digit percentage increases in "core" participation since 2009. They are lacrosse (13+ times/year (up 33.1 percent), rugby (8+ times/year, up 20.3 percent), ultimate frisbee (13+ times/year, up 19.2 percent), and beach volleyball (13+ times/year, up 18.9 percent). Road Runners: Nearly 50 million Americans are now running and jogging to stay fit -- up 12.6 percent from 2009. School vs. Travel: The three most popular team sports in high school are basketball, tackle football, and baseball. The three most popular team sports for travel-sport athletes (age 14-19) are soccer, baseball, and basketball. Electronic Stimulation: Almost 50 percent of U.S. online customers used some type of fitness technology in the past year -- according to a Consumer Electronics Association study. Fitness Fanatics: The three cities whose residents are considered the "fittest" in the country are Salt Lake City, San Diego and Austin. (Source: SportsOneSource Media, 05/19/11) |
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Instead of Buying a Home, Many Americans Opting to Rent A growing number of Americans can't afford a home or don't want to own one, a trend that's spawning a generation of renters and a rise in apartment construction. Many of the new renters are former owners who lost homes to foreclosure or bankruptcy. For others who could afford one, a home now feels too costly, too risky or unlikely to appreciate enough to make it a worthwhile investment. The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago, 31.6 percent of households were renters. Now, it's at 33.6 percent and rising. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press. All told, nearly 38 million households are renters. Among the signs of a rising rental market: -- The pace of apartment construction has surged 115 percent from its October 2009 low. It's still well below a healthy level. But permits for apartments, a gauge of future construction, hit a two-year peak in March. By contrast, permits for single-family homes are on pace for their lowest annual level on records dating to 1960. -- The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months. -- Demand is driving up rents. The median price of advertised rents rose 4.1 percent between the end of 2009 and the end of 2010, census data shows. Few expect the higher prices to stem the flood of renters, though. One reason: Younger adults don't value homeownership as earlier generations did and many prefer to rent, studies show. -- Rental housing is giving builders more work just as construction of single-family homes has dried up. Still, that economic lift won't make up for all the single-family houses not being built. Apartments account for only about one-fourth of homes. And renters are outspent roughly 2-to-1 by homeowners, who pay for items from lawn care to remodeling and help drive the economy. Before the housing bust, mortgage rates were so low it was often cheaper to buy than rent. That was true a decade ago in more than half the 54 biggest metro areas, according to Moody's Analytics. Today, by contrast, it's cheaper to rent in about 72 percent of metro areas. Consider Mason Hamilton, 26, an energy consultant who rents an apartment with his wife for $1,100 a month in Alexandria, Va., outside Washington. He'd like something bigger. But he says he doesn't plan to buy even though he could afford to. "My parents always told me, 'You need to buy a place; you need to buy property,'" he says. "But the housing market is insane." Many younger Americans see owning as risky. It hardly seems the best way to build wealth, especially when prices are falling. "There's been this idea for years, a part of the American dream, that owning a home improves and strengthens communities," said John McIlwain, a senior fellow at the nonprofit Urban Land Institute. "But what we've learned over the past few years is that many people simply are not ready to own a home." From the 1940s until 2007, homes appreciated an average of nearly 5 percent a year, adjusted for inflation. In the past four years, the median price of a single-family home has sunk 37 percent, by $57,500, to its lowest since 2002. Yet in some areas, owning is still too expensive for many. "It's becoming so difficult for most Americans to afford a home, with larger down payments and tighter credit, that it is creating a renter's nation," says Robert Shiller, a Yale economist and co-creator of the Case-Shiller home price index. "The home is no longer an investment; it's a burden." Homeownership bestows its own financial advantages, of course. Each loan payment builds equity. Loan interest and property taxes provide tax deductions. And in normal housing markets, home values rise over time. But for now, renting is more attractive. Hamilton, the energy consultant, says his father, a 58-year-old teacher in Richmond, Va., still owes nearly as much on his mortgage as his house is worth. "He's stuck in that house," Hamilton says. "After telling me to buy for all of those years, he'd love to rent like me." (Source: The Associated Press, 05/24/11) |
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